Thursday, 4:13pm
28 June 2012

When cheaper is just as good

Paper: beating the recession

Julia Thrift on beating the recession.

If someone told you that 50 per cent of the money you spent on a bottle of perfume went on advertising and marketing you would probably not be very surprised. When it comes to luxury consumer goods the brand image is so explicitly a part of what is being bought that it would be naïve to complain.

But if you were told that 50 per cent of the amount you had just spent on paper for your client’s annual report went on marketing, you might feel differently. Yet when all the free swatches, direct mail from merchants, visits from representatives, tree calendars, sponsored competitions and magazine advertising are taken into account, it is obvious that paper companies are spending a huge amount on promoting their brands.

In most cases, far less than 50 percent of what designers spend on paper will go on marketing it. Nevertheless, designers are creatures of fashion and like to try out new things, which encourages paper mills to continue to bring out new products, all of which have to be promoted. As Janey Hunter, marketing manager at James River Fine Papers in Scotland, explains, launching a new brand in a market that is already crowded with fine papers is both expensive and risky.

“Say we launch a new product in January,” she says. “And say we spend £100,000 on marketing it in the first year, and by the end of December we have sold 50 tonnes. We should have spent £2,000 per tonne on marketing. Obviously you would be foolish to spend £100,000 on marketing if you were only going to sell 50 tonnes, but I can think of more than half a dozen products launched in the last three years which are not selling more than 100 tonnes.”

Quite what an important and complex role marketing plays in selling high-quality papers was demonstrated recently by James River when it halved the price of papers in one of its top brands, Classic. In paper marketing terms, Classic used to be positioned as a super premium brand. However, as Hunter points out, “the super premium market has been eroded during the recession and the people have downgraded.” By “downgrading” the brand, the mill hopes to sell more of it, albeit at a similar profit margin.

For designers, the interesting aspect of this is that although the Classic brand has been rearranged to encompass more paper finishes, the basic quality has not changed. Extrapolate this across the whole of the available stock and you come to the conclusion that in some cases you could change to what seems a slightly lower-quality, cheaper paper and get much the same results.

The idea that designers could switch to cheaper paper without a loss in quality is made possible by two factors other than the paper companies’ current marketing ploys. First, designers very often overspecify, choosing a paper of higher quality than the job demands. Second, upgrades in paper-making technology have meant that in general the quality of paper has improved over the last few years. The brand you have been using for five years is probably better that it was when you started specifying it, which means you may be able to drop down as notch and still get the results you want.

The problem, of course, is knowing which brand to change to. Most designers are simply overwhelmed by the choice. James Murphy, a product manager at the Strathmore mill in the US, confirms that it used to be easier. “Ten or 15 years ago I would have said that most designers were very aware of what was on the other,” he says, “But today there are so many papers on the market that they tend to stick to just a few.”

One of the few paper companies to tackle this problem head on is the UK’s MoDo Merchants, which in autumn 1993 launched what it calls its “paper selector”. This is a comprehensive guide to the MoDo sells in terms of both price and performance. For each grade of paper there is a selection of thermometer-style symbols indicating how much it costs and what it will do, making it very obvious which paper is cheapest suitable stock for a job.

“We might be shooting ourselves in the foot,” admits MoDo Merchants’ marketing manager, Tim Forster, pointing out that it will now be easy for costumers to see when they are spending more money than they need to. Few companies, however, have suffered in the long run from providing their costumers with just what they want and the paper selector will surely be welcomed in what is now a very confusing market.

One area where designers may well realise that they could move to a cheaper stock is coated papers. Improvements in coating technology have meant that most grades perform better than they did a few years ago. Zanders, for instance, used to make three grades: Iconolux, a very high-quality gloss; Iconorex, a high-quality gloss or matt finish; and Iconofix, a mid-range gloss or mid finis. As the two lower grades got better, the Iconolux became obsolete. “They couldn’t make Iconolux sufficiently better, so they dropped it,” says MoDo Merchants’ Colette Baxter. “That gives you an idea of what’s happening.”

Another area where improved technology could help designers save their client’s money is magazine papers. The Finns in particular, have been investing heavily in machines which produce papers that are light, bulky and have a good surface. Confusingly, they tend to be more expensive per tonne, but work out cheaper because you get more pages per tonne. Being both light and bulky, they produce magazines which are less expensive to post without seeming flimsy.

Within this category there are three sorts of papers to bear in mind. The first is known as “machine-finished coated”, a grade developed by the Finns in the late 1980s. It differs from other coateds in that the paper is made and coated on a single machine, giving a lightly coated matt surface. They tend to range from 50 to 80 gsm and are suitable for heatset web offset printing. Because these papers have a good bulk for their weight, a magazine currently printed on a lightweight coated could be printed on a MFC which is a few grams lighter without appearing any thinner.

While MFCs have a matt surface, those who want a silkier surface could try a new grade, film-coated offset, to be launched in 1994. Made by the Kirkniemi mill in Finland, it is being sold by Lamco. John Clinton, director of Lamco’s London office, says: “It is going to be made in fairly low substances, 60 gsm downwards. It’s for offset printing, and we will be aiming it at people doing holiday brochures, catalogues and so on.”

The other grade worth considering is supercalendered papers. These are not coated, but are highly calendered (in effect, ironed) to give them a smoothish surface, suitable for gravure. Being uncoated, they have a good bulk for their weight. Although they have been around for years, the quality has recently improved, making them more popular. In Britain, the Ike furniture catalogue recently changed from a lightweight coated to a supercalendered, presumably because the company thought it could save a bit of money without cutting the print quality.

Bulk grades such as these are marketed for less heavily than fine papers. Bought in huge quantities, their prices reflect the laws of supply and demand rather than a marketing-driven image. It would, however, be wrong to think that top-of-the-range fine papers could be sold in the same way, according to Robert Latham, marketing manager at UK merchant Robert Horne.

“If you look at text and cover grades,” he says, referring to the distinctive high-quality papers often used for corporate print, “they are fashion items, they require a lot of research and there is often a very high cost of development in the first place. Then, they often require a lot of expensive ‘machine clothing’, dandy rolls and so on. Usually the ingredients are very expensive, too. Cotton fibres cost anything up to two or three times as much as virgin [wood] fibres. You’ve then got the high marketing costs, sending out swatches and so on. Then the merchants have to keep all sorts of colours, sizes and weights in stock, so you have huge investments there. And the average order size is very low.”

Latham’s argument is that although none of these papers is cheap, most of them offer designers good value for money. If designers want to have a large choice of interesting papers, they have to pay for it.

There is no doubt a lot of truth in this. Nevertheless, it remains the case that some top-quality papers offer better value for money than others, and that most designers will find that it certainly pays to shop around.

First published in Eye no. 12 vol. 3, 1994.